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Verizon, based on market research has identified three customer segments. The demand curve for each customer segment is shown here: Customer segment Demand curve Segment-1
Verizon, based on market research has identified three customer segments. The demand curve for each customer segment is shown here: Customer segment Demand curve Segment-1 Q=60-20.P Segment-2 Q=70-30.P Segment-3 Q=50-8.P Q is the monthly data usage demand in Gigabytes and P = price in dollars charged for each GB usage. It costs Verizon 30 cents to provide each GB of mobile data. An Excel template is provided. Note: You may follow similar examples worked out in various ICAs. a. If Verizon charges the same price for each GB of mobile data usage, what price should they charge? Show your work on a separate worksheet of the Excel workbook. b. Find the profit maximizing a two-part tariff for Verizon. The two-part tariff consists of a fixed monthly charge and per GB usage charge. For example, your mobile provider could be charging $50 monthly fee and $5.00 per GB usage. Your task here is to find the optimal two-part tariff (Fixed monthly charge and per GB price) that Verizon should implement so that profits are maximized. Show your work on a separate worksheet
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